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Bank Credit Facilitation Scheme for MSMEs

Bank Credit Facilitation Scheme for MSMEs

The Micro, Small, and Medium Enterprises (MSME) sector is considered the backbone of the Indian economy. It contributes around 30% of India’s GDP and provides employment to millions of people. However, MSMEs face several challenges, including access to finance, which limits their growth potential. To address this issue, the government has introduced various schemes to provide credit facilities to MSMEs, one of which is the Bank Credit Facilitation Scheme.

What is a Bank Credit Facilitation Scheme?

The Bank Credit Facilitation Scheme is a government initiative aimed at providing easy and quick credit to MSMEs. The scheme is implemented through the National Small Industries Corporation (NSIC), a government-owned enterprise. Under this scheme, NSIC assists MSMEs in obtaining credit from various financial institutions, including banks, NBFCs, and small finance banks

How does the scheme work?

Under the Bank Credit Facilitation Scheme, NSIC acts as an intermediary between the MSMEs and the financial institutions. The scheme provides MSMEs with a range of services, including credit assessment, preparation of project reports, loan application submission, and follow-up with financial institutions.

The scheme has a simple application process. The MSMEs have to approach NSIC with their loan requirements, and NSIC assists them in preparing the necessary documents, such as project reports and financial statements. NSIC then forwards the loan application to the relevant financial institution and follows up with them until the loan is sanctioned and disbursed.

What are the benefits of the scheme?

The Bank Credit Facilitation Scheme offers several benefits to MSMEs. Some of them are:

  1. Easy access to credit: MSMEs face several challenges in obtaining credit from financial institutions due to their size and lack of collateral. The Bank Credit Facilitation Scheme addresses this issue by providing MSMEs with easy access to credit.
  2. Quick loan processing: Under the scheme, NSIC assists MSMEs in preparing the necessary documents and forwarding loan applications to financial institutions. This reduces the processing time for loans and ensures quick disbursement of funds.
  3. Lower interest rates: MSMEs often have to pay high-interest rates on loans due to their perceived risk. The Bank Credit Facilitation Scheme offers MSMEs the benefit of lower interest rates, as NSIC negotiates with financial institutions on behalf of MSMEs.
  4. Preparing project reports: MSMEs often lack the expertise to prepare project reports required for obtaining loans. NSIC assists MSMEs in preparing project reports, ensuring that they meet the requirements of financial institutions.
  5. Facilitating follow-up: NSIC follows up with financial institutions to ensure that MSMEs receive the loan in a timely manner. This reduces the burden on MSMEs and ensures that they can focus on their business operations.

Who can apply for the scheme?

The Bank Credit Facilitation Scheme is available to all MSMEs registered with the Ministry of Micro, Small, and Medium Enterprises (MSME). The scheme is especially useful for first-time borrowers and those who face difficulties in obtaining credit from financial institutions.

What are the documents required for the scheme?

MSMEs need to submit the following documents to avail of the Bank Credit Facilitation Scheme:

  1. Application form
  2. Project report
  3. Financial statements, including balance sheet and profit and loss statement
  4. KYC documents of the MSME and its promoters
  5. Bank statement for the last six months
  6. Copy of the MSME registration certificate
  7. Other relevant documents, as requested by NSIC or the financial institution


The Bank Credit Facilitation Scheme is a much-needed initiative to provide easy access to credit to MSMEs. The scheme’s benefits, including quick loan processing, lower interest rates, and assistance in preparing project reports, make it an attractive option for MSMEs looking to expand their operations.

MSMEs must take advantage of this scheme to help them overcome the challenge of access to finance, which is a significant barrier to their growth. The government’s efforts to support the MSME sector, which is the backbone of the Indian economy, are commendable, and schemes like the Bank Credit Facilitation Scheme are a step in the right direction.


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